Coal strike threatens South African exports

10:56, July 26, 2011      

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A strike by thousands of South African coal industry workers, which began on Monday, is threatening the country's exports, the Business Day newspaper in Johannesburg reported on Monday.

The newspaper quoted a spokesman for South Africa's power utility Eskom, Tony Stott, as saying the strike should not hit the country's power supplies yet. Eskom supplies 95 percent of South Africa's electricity.

Stott said he saw no immediate impact on Eskom's ability to supply electricity.

He said Eskom has on average 38 days of coal stockpiles at its power stations. "If the strike goes on for a long time and demand goes up due to cold weather, it would put the system under severe strain," he said.

Xavier Prevost, an analyst, told Business Day that the stock piles of coal from the crisis should help Eskom sustain power generation for the duration of the strike, if it was not protracted into many weeks.

Prevost is concerned about the strike's potential effect on South Africa's exports.

"Coal is a major export for South Africa so a strike by its workers will dent the economy," he said.

The spokesman for South Africa's National Union of Mineworkers (NUM), Lesiba Seshoka, said employers have offered pay rises of seven percent to 8.5 percent. There are currently no plans for fresh talks, he said.

Eskom has been under pressure to build new plants as it tries to avoid another power crisis like the one that resulted in power outages in 2008.

However, the utility actually has excess coal, which could help it now, while thousands of workers stay-away from work.

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